Sunday, December 28, 2014

Curbs on gold imports drive smuggling: Centre

The Union government has said restrictions imposed on
gold imports to stem the pressure on the Current Account Deficit (CAD)
are likely to have led to a substantial increase in smuggling. From
April to September this year, there was a more than four-fold increase
in the seizure of smuggled gold, to 2,289 kg, against 522 kg seized
during the same period last year.

Giving the
information in a reply to a written question in Parliament last Friday,
Minister of State in the Finance Ministry Jayant Sinha said: “…there had
been a substantial increase in the seizure of smuggled gold as well as
in the gold imports.”

Twelve Lok Sabha members had raised questions about gold imports.

“The
increase in seizures of smuggled gold this year, compared to last year,
may partly be attributed to the fluctuations in the price of gold, the
restrictions imposed on the import of gold and customs duty rates,” Mr.
Sinha said.

To stem the pressure on the CAD, the
government and the Reserve Bank of India had taken measures to moderate
the demand for the precious metal. These included an increase in customs
duty on imports and prohibition of gold in the form of coins and
medallions. Nominated banks and other entities were told to make
available at least 20 per cent of every lot of gold import as input for
export. The obligation to export was on star or premier trading houses
and refineries. Also, gold import to the Special Economic Zones (SEZs)
and Export Oriented Units (EOUs) was permitted for the sole purpose of
export.

As the CAD situation improved and the quantum
of gold imported reduced significantly, at November-end, the Centre
withdrew the stipulation of a minimum export of 20 per cent of every lot
of import.

In response to another question on the
seizure of smuggled gold at Delhi International Airport, Mr. Sinha said
field formations had been suitably alerted and surveillance enhanced.
The number of seizure of smuggled gold had risen from 1 during 2011-12
to 294 from April to November 14 this year, he said. The quantity of
gold seized was also up from 2 kg to 447 kg. As against one person
arrested during 2011-12, 144 people were arrested this year.